Role of Banks on Economic Development: A Special Reference to Management of NPA in Public and Private Sector Banks

Abstract

Non-performing assets are advances e been past due over more than 90 days in terms of interest and/or principal payments. A substandard asset remains non-performing for a period of less than or equal to 12 months. An asset is as doubtful if it has been in the substandard category for 12 months. A loss asset is one in which the bank has identified a loss or external auditors, or an RBI inspection but the amount has not been fully written off. The study focused mainly on the comparison of NPAs and Bank performance across public and private sector banks, To discuss trends in bank performance concerning public sector and private sector banks- descriptive statistics comparison. To analyse trends of NPA in public sector bank and private sector bank- Descriptive Statistics Comparison. The study focused on scope, significance, and methodology. The study regarded Axis Bank as a public sector bank representative and Bank of Baroda as a private sector bank. Correlation analysis is a statistical technique used to determine the direction and strength of a relationship between two variables. Correlation analysis can be used to assess the relationship between nonperforming assets (NPAs) and key economic metrics such as financial stability, credit growth, and profitability. The study can find differences in how public and private sector banks affect economic development by comparing correlation patterns between them. The basis for focused policy interventions is this analysis, which offers insightful information about how NPAs and more general economic factors are interconnected. Finally, the study analyzed the data and interpreted the results. Suggestions also discussed in the study.